ABSTRACT
Background The chain of transport and storage activities from first supplier to end customer has during the years changed character and gradually developed from a step-wise chain via a logistical chain into a supply chain (Cooper et al, 1997). This development has had many consequences. The one that is studied here is the new and changed risks interest in the supply chain. The number and character of the risks and the total risk exposure, change as the chain changes. Since the supply chain is made up of a number of links, where each link normally is an independent company,company risks change as well.Company risks of different kinds have been more and more in focus during the last decade both in the media (Simons, 1999) and as a research topic. In some countries new legislation has been put forward making it compulsory to include risk assessment information in annual reports. The tragic events of 11th September have further stressed the vulnerability of our modem society and of its flows of material and information (Greenberg, 2002). An often heard opinion is that organizations as well as society as a whole in the future need access to more knowledge and will need to become more proactive to be able to handle those risks (Rasmussen and Svedung, 2000).Risk is defined by The Royal Society ‘as the probability that a particular adverse event occurs during a stated period of time, or results from a particular challenge’ (The Royal Society, 1992, p.2) - in other words the probability that an event with negative consequences will occur. To be able to handle risks, risk management is needed. The same source defines risk management as ‘the process whereby decisions are made to accept a known or assessed risk and/or the implementation of actions to reduce the consequences or probability of occurrence’ (The Royal Society, 1992, p.5). Formulated in another way: ‘Risk management means taking deliberate action to shift the odds in your favour’ (Borge, 2001).A number of trends during the last decade have affected the supply chain risk situation. One is that the supply chain should be lean, another that it should be agile as well (Christopher and Towill, 2000; Mason-Jones et al, 2000). A third trend is outsourcing resulting in more links in the chain. Single sourcing is still another trend and of course there is the issue of globalisation. All these trends lead to increased vulnerability (Juettner et al, 2002; KajUter, 2003). For instance: By making the chain more lean through eliminating buffer stocks this will surely
increase productivity but it will also, if nothing else is done, have less possibilities to handle disturbances. The existence of a new risk situation in supply chains is now becoming realized by more and more researchers and practitioners (Juttner et al, 2003; Kajiiter, 2003). Supply Chain Risk Management - A New Research Area Supply Chain Management has been an established research area for at least ten years now and Risk Management for much longer than that. The development of the supply chain described in the previous section has made it necessary to get inspiration for new ways of handling the vulnerability in the chain and Risk Management has become an important area of inspiration. A new research area called Supply Chain Risk Management has developed.
